As an organization grows, the infrastructure is often in need of rebuilding. The tools for getting business done are continually changing. We should always be investing in the rebuilding of our infrastructure.
In some ways, running a business is similar to maintaining a house. There is always something out of order that needs attention. And additionally, we want to utilize the latest upgrades to improve our business processes.
Let’s think about some of the considerations to keep in mind as we are rebuilding our infrastructure.
What is our infrastructure?
A business’s infrastructure includes the set of tools used to get things done. Every mental health business uses phones, a website, practice management software, a legal structure, and some insurances, to name a few parts.
Perhaps we should also include some of the physical elements to the list, such as office equipment and space. All contribute to getting the work done, especially in the back office. And all require care, maintenance, and upgrades.
Everything gets out of date
Everything gets out of date, and so needs replacement or upgrading. Sometimes this means replacing a piece of equipment or redecorating an office.
As a simple example, whenever one of our offices was empty, we took the opportunity to have the room repainted. In addition to keeping the office looking sharp, the gesture was an excellent way to welcome the next person to the new space.
In other places I have written about areas requiring upgrade:
- Growing pains: Outgrowing our brand
- Eight steps to adding office space in psychotherapy practices
- Developing a practice website
- Selecting a practice management system
Make the back office more efficiency
One of the key reasons to upgrade is to increase back-office efficiency. Any tool that helps your staff be more efficient saves in expense and frustration. While tedium is part of everyone’s work, tools that smooth out the process for an employee is a win for all.
I have written elsewhere on the benefits of watching for process bottlenecks. See:
Offloading therapists work
One of the objectives that guided some of my decisions about infrastructure was to ease therapists’ loads in any way we could. Why was this important? Several reasons.
Therapists are great at relationships. But not all are efficient at paperwork. Handing off or giving therapists more useful tools helps everyone.
One example. We used a medical database for all our scheduling, billing, and records. After using the software for a few years, we add an Electronic Medical Record (EMR) module. Getting the system to work the way we wanted took a couple of years of work. With the software vendor, we rolled out a set of EMRs, and the staff would use them for a few months.
In the end, we were able to develop a method for completing a record that used mostly checkboxes and dropdown menus. The software took the therapists’ info and created a professional narrative. The investment of time was more than worth it.
How to pay for rebuilding your infrastructure
Beyond the efforts we put in, most rebuilding takes money. We have three options for paying for things.
- Buy it outright from cash reserves,
- Borrow on credit which then becomes monthly bill for the term of the loan, or
- Pay for it in monthly service fees.
My view? I prefer to avoid monthly service fees. I would rather pay with cash reserves or set up a loan. Why avoid paying monthly service fees?
When evaluating options, we should consider the “whole life cost” of the upgrade or purchase. The idea is to find the total cost of ownership over the life of using the equipment or service. When one considers the whole life cost, paying a monthly service fee is usually the most expensive way to pay, and in some cases, very much more costly.
If we take this approach, expenses will fluctuate depending on the year these big-ticket items were purchased. For example, we bought a phone system that linked our three offices via the internet. When we upgraded to a Voice Over IP (VOIP) system, the initial cost was over $10,000. But over the years, the savings in phone charges alone offset the costs. And the system is still going after ten years. And that made the whole life cost quite low.
Nevertheless, there should be exceptions. I think monthly service fees make sense when one cannot afford the upfront costs. Likewise, monthly payments make sense when you do not know quite what you want.
When to finance
Financing is another option to consider. We borrowed and then paid off two large purchases. One time we purchased 15 computers at once. Another time we bought our practice management system. We purchased both these with loans that had a two or three-year term. We calculated that we could handle the monthly payment costs. Certainly, we needed the equipment to be efficient.
Of course, some owners take a more conservative approach to debt. My commitment was not to borrow for a “practice threatening” crisis. But I would borrow as an investment in practice efficiency. I have written more about the concepts of glitches vs. threats here: Psychotherapy practice finances in a crisis.
My general rule is this. Get something that works and then strive for cost savings from there. That is why we upgrade.
Investing in the future
And finally, the best reason to upgrade or rebuild your infrastructure is as an investment in your company’s future. Change is the constant in life, and so it is in business too.